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June 1, 2022

Travelodge’s new budget-luxe hotels increase choice for travellers

With the diversification of budget brands, the UK consumer will emerge as the winner.

By Globaldata Travel and Tourism

Following Travelodge’s announcement regarding the development of its budget-luxe hotels, the company looks set to shake up the UK’s hotel sector by providing guests with more affordable options.

A luxurious experience at a low price

The budget-luxe concept is nothing new within the sector and has proven to be successful in recent years, with Motel One and Ibis Styles already operating effectively in this space. These hotels offer chic, modern designs and high-quality service while operating with low operational costs. Many Motel One properties, for example, are two-star properties. However, the layout and contemporary design of these hotels make guests feel as though they are staying in a higher-grade property.

Furthermore, the introduction of Travelodge’s budget-luxe hotels is a timely one, as travel is showing signs of recovery. In addition, due to the economic hardship of the pandemic and the subsequent rising cost of living, travellers are going to be more budget-conscious than ever. According to a GlobalData Q3 2021 Global Consumer Survey, 58% of respondents said affordability was the primary factor in deciding where to go on a trip.

The budget hotel sector is evolving

In recent times many would have considered budget hotels to be plain two-star properties with limited facilities, services and basic decor. However, the budget hotel space has been evolving to cover more market segments in recent years. Ibis, for example, has split into three different brands. Its super low-cost brand Ibis budget, its flagship brand Ibis and more contemporary Ibis Styles hotels. Premier Inn has also introduced a similar initiative with Hub by Premier Inn and Zip by Premier Inn, which offers a streamlined service along with basic accommodation. As a result, consumers now have more choices than ever within the low-cost space.

Expectations must be managed

Being one of the UK’s most recognizable hotel brands, Travelodge’s image must be in keeping with consumer expectations. The creation of a truly upscale brand would have struggled to attract its core market, and competing with established luxury hotel chains would have been a difficult task. Therefore, the development of a budget-luxe hotel brand seems fitting. However, it is important to note that most of Travelodge’s focus will likely be on aesthetics rather than the level of service and facilities offered, as this would increase operational costs to a point where profit margins may be too slim or non-existent.

With the diversification of budget brands, the UK consumer will emerge as the winner. An increase in budget options comes at a time when the cost of travel is being stretched and the cost of living is soaring. Travelodge’s new budget-luxe hotels could attract long-standing budget travellers, as well as upscale travellers that are now looking to save money where possible when planning a trip.

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